Category: Agriculture

Background

Agriculture, fishing, and forestry play a significant role in terms of employment creation, contribution to GDP, foreign earnings, and food security. Real value added in the industry increased by 2.6% in 2022, and between 2010 and 2022 the sector contributed around 7.9% to GDP on average.

Analysis

Namibia’s export earnings from agriculture, forestry, and fishing commodities amounted to N$ 971 million for Q1 of 2023 whereas the import bill stood at N$ 806 million when compared to the export earnings of N$ 4.0 billion and import bill of N$ 1.1 billion in Q1 of 2022. Fish products during the quarter under review attracted export earnings of N$ 4.0 billion relative to N$3.1 billion recorded in Q1 of 2022 while the import bill amounted to N$ 167.9 million down from N$194.6 million recorded in Q1 of 2022.

Fisheries Products

During the period under review, horse mackerel recorded the highest landings of 43 346 metric tons, followed by Hake and Monk with 41 155 and 1 672 metric tons, respectively. Fish and crustaceans, mollusks, and other aquatic invertebrates worth N$ 4.0 billion were exported during the period under review, relative to N$3.1 billion recorded for the first quarter of 2022.  The main export market for fish was Spain accounting for 32.9%, followed by Zambia at 16.2%, and lastly the Democratic Republic of Congo with a share of 12% of the total fish export.

In terms of imports, the country demanded fish valued at N$ 167.9 million during the first quarter of 2023. Fish products were mainly imported from Morocco (19.4%), Chile (17.6%), and the United States of America (14.1%).

Livestock

From a decline of 30.7% in the comparable quarter of 2022, the number of livestock marketed increased by 7.8% in the first quarter of 2023. Namibia marketed a total of 74 289 heads of animals during the period under review. Goats posted the highest growth of 26.4% (15 898 heads), followed by sheep which saw an increase of 18.1% (11 897 heads). During the period under review, the country marketed a total of 46 494 cattle an increase from 46 271 cattle marketed in the corresponding quarter of 2022.

In terms of auction prices, prices across all types of livestock recorded declines during the quarter under review. Cattle posted N$ 31.82 per KG which is a 13.2% reduction, followed by goats which posted a decline of 6.2%. Goats and sheep recorded average prices of N$31.34 per KG and N$32.19 per KG, respectively during the first quarter of 2023. This was ascribed mainly to an increase in the supply of weaners from Botswana to South Africa, resulting in an oversupply of livestock in the South African market, and eventually contributing to a decline in weaner prices in Namibia.

Trade of selected horticultural products

During the quarter under review, grapes were the top exported product recording foreign earnings of N$ 79.9 million. The export of date and tomatoes were also significant posting values of N$ 58.2 million and N$ 19.8 million, respectively. In terms of horticulture imports, apples ranked first with a value of N$ 24.8 million, followed by vegetable seeds with a value of N$ 20.8 million and onions with a value of N$ 13.4 million. The top traded goods in both exports and imports were onions and tomatoes.

Figure 1: Agriculture, forestry, and fishing sector % share to GDP, (2022Q1 – 2023Q1)

Source: NSA & HEI Research

Figure 2: Top ten imported horticultural products in million N$ for the first quarter of 2023

Source: NSA & HEI Research

Background

The agriculture, forestry, and fishing sector continued to face challenges, especially from the pressure of market distortions resulting from the higher prices of general goods. The disruptions have exacerbated the vulnerability of the sector, especially in terms of input price volatility for agricultural, forestry, and fishing commodities. Furthermore, the price fluctuations have exposed the sector to value chain disruptions particularly influenced by high input costs.

Namibia’s export earnings from commodities of agriculture, forestry, and fishing sector amounted to N$4.4 billion for Q4 of 2022 whereas the import bill stood at N$1.2 billion. Although the fisheries products and agriculture commodities accounted for the highest foreign earnings with N$2.4 billion and N$1.6 billion, respectively for Q4 of 2022 the values declined relative to Q3 of 2022. Fisheries products earnings for Q3 of 2022 were N$ 2.7 billion while agriculture commodities were valued at N$ 606 million.

Analysis

Fisheries Products

During the period under review, hake was the top exported product valued at N$ 1.1 billion for 15 869 metric tons, followed by horse mackerel valued at N$ 849 million total horse mackerel exported weighted 30 984 metric tons. The main export market for hake was Spain accounting for 56.5%, while for horse mackerel was Zambia accounting for 50%.

Horse Mackerel topped the list of imports, with a value of N$57.8 million and a weight of 2 745 metric tons followed by Sardine with a bill of N$41.3 million for 2 035 metric tons, and Tilapia with a bill of N$22 million for 1 185 metric tons.

Agriculture Commodities

Namibia exported 63 275 tons of agricultural commodities valued at N$1.6 billion and imported 71 935 tons of commodities valued at N$ 700 million. The export of fresh grapes stood at 42 156 tons valued at N$1.1 billion and fresh watermelons were 1 464 tons valued at N$17.5 million. During the quarter under review, a total of 58 306 tons of horticultural products were exported when compared to 51 696 tons exported during the same quarter last year.

The total number of livestock marketed for Q4 of 2022 stood at 214 802 when compared to 176 820 recorded in the same period of 2021. This translated into an increase of 21%. During the quarter under review, there were no imports of both cattle and small stock (goats and sheep) as a result of an import restriction due to the foot and mouth disease.

Namibia exported 35 346 cattle on hoof, valued at N$276.3 million. This is an increase of 10% when compared to 32 129 cattle that were exported at a value of N$255.1 million in Q4 of 2021. The number of small stocks marketed (goats and sheep) during the period under review stood at 147 007 compared to 111 302 small stocks marketed in the corresponding quarter of 2021.

Figure 1: Agriculture, forestry, and fishing sector % share to GDP, (2021Q4 – 2022Q4)

Figure 2: Export of fish and crustaceans in (N$) million, (2021Q4 – 2022Q4)

Agriculture is one of the country's most significant productive sectors, however, the sector faces greater risks compared to other productive sectors of the economy. The risks include lack of access to finance and low-rainfall seasons that often leads to droughts. The risks have made both crop and livestock farming challenging, leading to high instability in agricultural production. During times of drought, communal farmers are the most affected when it comes to any shocks in the production or value chain systems. The agricultural sector percentage share to Gross Domestic Product (GDP) for the years 2015, 2016, and 2019 recorded declines of 3.8%, 3.6%, and 4.2% respectively (See figure 1). The below-normal rainfall since 2013 is consistent with a declining trend in agricultural productivity and the debt level which has heightened fears of food insecurity. The funding of agriculture is a major bottleneck in expanding agricultural production.  Although Agribank’s loan disbursements over the years have increased, additional investment in agriculture is needed to fully unlock private sector investment and domestic productive capacity (See figures 2 & 3).

Domestic agricultural debt has significantly increased over the years. During the period under review, the accumulative figure extended to agriculture in credit by the Agribank and commercial banks stood at about N$ 22 billion and was recorded in 2019 owing to a decline in primary agricultural production as a result of droughts that led to the massive loss of livestock (See figure 4). The productivity and revenue of farmers that use agricultural loans increase depending on their timely and sufficient use of inputs. Namibian farmers’ ability to repay loans is negatively affected by fewer herd sizes to market coupled with recurring drought and long-term debt as they rebuild their herds.

According to Agribank of Namibia (2022), the agriculture sector is expected to remain resilient in 2023, owing to better rainfall for crops and improved rangeland conditions for livestock farmers. Farmers are encouraged to continue diversifying their farming operations to minimize the risk of climatic, sectoral, or economic shocks on production output and sales. Investments in the agriculture sector are essential to boost productivity, precisely focusing on technological change and climate-resilient production techniques.

Figure 1: Agriculture sector % share to GDP, (2013-2021)

Figure 2: Commercial vs Agribank loans, N$ billion (2010-2021)

Figure 3: Agribank’s Historical Advances vs Non-performing loans, N$ billion (2010-2021)

Figure 4: Cumulative domestic agriculture debt and %YOY Growth, N$ billion (2011-2021)

Background

The agriculture, forestry, and fishing sector were not spared from the pressure of the market distortions that resulted from price volatility and value chain disruptions particularly caused by the transportation component. High energy demands that have been causing fuel, oil, and energy prices to increase have negatively affected the agriculture sector. The agriculture, forestry, and fishing sector share of GDP for Q3 of 2022 declined to 6.4% from 12.9% recorded in Q2 of 2022. Livestock accounted for 3.4% of GDP, followed by the fishing subsector (2.3%), and crop subsector (0.4%). The forestry subsector was the least contributor recording 0.3%. Export earnings for agriculture, forestry, and fishing products amounted to N$ 3.7 billion for Q3 of 2022 while the import bill stood at N$ 1.3 billion. Fisheries products continue to account for the highest foreign earnings at N$ 2.7 billion followed by agriculture commodities valued at N$ 606 million.

Analysis

Fisheries Products

The fishing sub-sector is one of the important sectors in the economy as it is an important source of foreign earnings for the country. During the period under review, hake was the top exported product with earnings valued at N$1.2 billion, followed by tilapia (N$ 1.6 million), and salmon (N$ 0.5 million). The top three export markets were Spain (52.1%), France (12.7%), and Italy (9.6%). In terms of import, tilapia was the main imported product valued to the tune of N$1.5 million. South Africa accounted for 38% of fish fillets and other fish meat imports.

Agriculture Commodities

The trade of vegetables dominated the trade flow of agricultural commodities. During the quarter under review, the value of exported vegetables increased from N$ 101.1 million in Q3 of 2021 to N$ 151.5 million for Q3 of 2022. Tomatoes and onions were the most exported vegetable types, recording values of N$ 71.3 million and N$ 37.6 million, respectively. South Africa claimed the highest share of 76.2%, followed by Angola (20.3 %) in terms of the export market.

Live Animals

International demand for Namibian live animals stood at N$ 400.2 million in Q3 of 2022, a decline when compared to N$ 440.3 million recorded in Q3 of 2021. The decrease in exports came as a result of the border closure for livestock exports to South Africa. Cattle, sheep, and goats contributed the most value of export of live animals in Q3 of 2022, recording N$ 258.0 million, N$ 100.4 million, and N$ 28.5, respectively. The relatively lower cost of farming encourages the export of Namibian live animals to feedlots in South Africa.

Figure 1: Agriculture, forestry, and fishing sector % share to GDP, (2021Q3 – 2022Q3)

Figure 2: Top export of live animals in (N$) million, (2021Q3 – 2022Q3)

Background

According to the agriculture, forestry, and fishing sector statistical bulletin first quarter of 2022, the value-added for the agriculture, forestry, and fishing sectors for the first quarter of 2022 was estimated at around N$ 3.3 billion in nominal terms (7.2% of GDP) (See figure 1 below). The country’s export earnings from commodities in the agriculture, forestry, and fishing sector amounted to N$ 4.0 billion whereas the import bill stood at N$ 1.1 billion. Total export earnings increased by 11% in relation to the same quarter last year. Fisheries products accounted for the highest foreign earnings at N$ 3.1 billion followed by agriculture commodities which brought income of N$ 564.8 million. This is an indication that Namibia is a net exporter of agriculture, forestry, and fishing commodities (See figure 2).

Analysis

Trade for the fish sector

During the period under review, the fishing sector dominated the export of agriculture, forestry, and fishing commodities for Namibia. Total fish and fish products exported amounted to N$ 3.1 billion accounting for 75.5% of total commodities exported. Total fish and fish products exported rose by 7.4% when compared to the same quarter last year. Horse Mackerel was the main species exported with export earnings of N$989.9 million, followed by hake (N$103.1 million) and albacore (N$44.9 million). The import bill stood at N$ 194.6 million. The import bill increased by 27.7% relative to the same period last year. Sardine was the top imported species with an import bill of N$100.8 million, followed by hake and tilapia with N$18.8 million and N$12.1 million respectively.

Agriculture Trade Pattern

Namibia exported live animals valued at N$ 384 million in quarter 1 of 2022 and exports were dominated by live cattle followed by sheep and goats that were mainly destined for South Africa, the United Arab Emirates, Angola, Botswana, and Zimbabwe. The export of live animals accounted for about 68.2% of total agricultural commodities exported. On the import side, the country imported live animals valued at only N$ 30.7 million. 

During the first quarter of 2022, fruits and nuts accounted for about 81.2% of total agricultural commodities exported with grapes, dates, and “mangoes and guavas mangosteens” being the top three exported products in the category. The international demand for Namibian fruits and nuts stood at N$145.7 million while imports amounted to N$84.0 million. The top three imported products under the ‘fruits and nuts’ category were apples, bananas, and grapes with an import value of N$22.1 million, N$9.7 million, and N$8.5 million respectively.

Trade of wood and articles of wood

During the period under review, the country exported wood and articles of wood valued at N$ 322.4 million. The import bill for wood products amounted to N$ 104.6 million. The export of wood products is dominated by wood charcoal which accounted for 88.6% of total wood products exported. 

It is clear that there is a market for Namibia for these commodities, thus it is imperative to invest in these sectors. Investment in these sectors could create high employment opportunities, especially for the youth and these will also help increase production and grow the economy. Additionally, the beneficiation and value addition to all agriculture, forestry, and fishing commodities in the domestic market should be explored for economic growth.

Figure 1: Agriculture, Forestry, and Fishing sector % share to GDP (2021Q1 – 2022Q1)

Figure 2: Top exported Agriculture, Forestry, and Fishing commodities for Quarter 1 of 2022

Background

Mahangu, also known as pearl millet is one of the most common staple food crops in Namibia contributing largely to the overall food security of the country. About 95 percent of mahangu is locally produced and 5 percent is imported from India. The mahangu production for commercial purposes is concentrated mainly in the Zambezi, Kavango and Otjozondjupa region. Producers in the Oshikoto, Oshana, Ohangwena, and Omusati region produce mahangu primarily at a subsistence level for household consumption and only market when there is excess supply. The marketing of mahangu for Namibia commences on the onset of quarter 1 annually and run until it is secured by the National Strategic Food Reserve and producers.

Analysis

The production of mahangu has been driven by demand over the years with a gradual increase in local production (See figure 1). The period between 2010/2011 and 2020/2021 saw local mahangu production at 14 796 tons which translate in 1345 tons per year. The season of 2020/2021 recorded the highest production of mahangu over the period under review on the back of good rains at the beginning of this year.

The Zambezi region account for 31 percent of the national total tonnage of mahangu produced, followed by the Oshikoto region with 24 percent and Otjozondjupa region accounts for the lowest production of mahangu of 1 percent (See figure 2). Mahangu is currently the least imported grain due to the fact that it is highly adaptable to low rainfall and the prevailing soil conditions in Namibia.

Figure 1: Mahangu (2010-2021)

Figure 2: Mahangu production tons per area (2020/2021)

Outlook

The outlook on the local production of mahangu for Namibia is positive due to the above-average rainfall reported in the country for the current harvesting season. There is definitely room for building the necessary efficiencies in order to export this Namibian product. There is currently no risk to the supply of mahangu as a consequence of the social unrest that South Africa experienced over the past weeks, as Namibia does not import the product from the neighboring country.

Recommendations

The relatively low production of mahangu in the past 10 years can be attributed to a number of facts which include supply constraints such as, lack of farming equipment, machinery, and financial resources. In order for Namibia to scale the current production level and have a comparative advantage for the export market there is a need for investment in research and development, training and acquiring knowledge in the use of new farming techniques. Additionally, it is also important that the financial services providers help farmers with the needed financial resources to boost production. This will enable farmers to be more competitive in the context of the new dawn around AFCFTA.